MESOP LATEST : Kurdish Annual Oil Income Tops Four Billion Dollars

02.09.2014 –  Shwan Barzinji – BasNews, Erbil – The Deputy of the Natural Resources Committee in the Kurdistan Region, Dilshad Sha’ban, has said that annual revenue from Kurdish oil sales has reached US$4 billion but the salary of government employees is $8 billion. He believes the problem of employees salary will be resolved if Kurdish oil production reaches 500,000 barrels per day.In an exclusive interview with BasNews, Sha’ban spoke about Kurdish oil and the oil income of the Kurdistan Region.

Sha’ban aslo talked about the impact of the threat from Islamic extremists on the oil sector saying, ‘No problems have appeared and oil companies in the region continue their work in extracting oil. Oil exportation has been maintained at 120,000 – 150,000 barrels per day which gets exported to Turkey. It has been decided to expand production to 500,000 barrels per day by the end of the year.’

‘According to agreements between the KRG and oil companies, after paying the transportation and loading costs of the companies, $60 – $70 from each barrel remains for the Kurdistan Regional Government (KRG). If we calculate based on $65 as an average, the annual oil income will be $4 billion. So far KRG has received $450 million in oil revenue, part of which has been given to banks and companies that provided loans to the KRG,’ he said.He continued: ‘In order to be able to honour salaries of KRG employees, we need $8 billion as it can’t be fulfilled by our internal income which is only $2,500,000 per year. Therefore, if oil exportation increases to 500,000 barrels per day, the salary problem will be resolved.’

Sha’ban mentioned that as far as they are aware, seven million barrels of Kurdish oil have been sold via oil tankers, the latest ones having been sent to Mexican and US ports. ‘100% of the Kurdish oil income comes to the Kurdistan Region. Not a dollar has been sent to Baghdad because the federal government of Iraq hasn’t sent the 17% budget allocation and has also cut the salary of KRG employees. Thus, we will not send one single dollar to Baghdad,’ said Sha’ban.

Referring to complaints in court against the KRG selling oil independently, Sha’ban pointed out, ‘Baghdad made a complaint against Turkey in the court claiming they smuggle Iraqi oil, but they lost. Later, they made another complaint against the KRG in the federal court of Iraq, but the decision of the court favoured the Kurdistan Region, delivering the decision that the selling of oil by the KRG is legal.’ ‘The last complain that Baghdad made against the KRG was in the Texas court after the Kurdistan Region sent an oil tanker to Texas. Once more the decision of the court was in the interests of the Kurdistan Region. Perhaps some countries had doubts about buying KRG oil, fearful of damaging their diplomatic relations with Iraq, but the decision of Texas court removed this doubt. I believe demand for Kurdish oil will rise, especially from countries in Asia and Europe, and that will oblige the Kurdistan Region to increase its oil exports,’ added Sha’ban.